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Wednesday, December 30, 2009

Rachael Chong put together the most comprehensive list of startup capital options for social entrepreneurs that I've ever come across. Click here for the full article. Rather than rehash her work, I'll spotlight two sources that are new to me: Unreasonable Institute and Good Capital. Descriptions of both organizations come directly from their websites.

We unite up to 25 high-impact social entrepreneurs from around the world to attend our intensive 10-week summer institute. There, we will incubate their ventures with rigorous skill training and expert mentorship. At the end of the ten weeks, we will connect our Fellows with the start-up capital and global network of support needed to give their ventures wings.

We are looking for the world's most unreasonable, bold, and relentlessly determined young social entrepreneurs.

All ventures must effectively address a social or environmental issue, be financially self-sustaining within 1 year, have a model which can be scaled out of the country of origin within 3 years, and must eventually meet the needs of at least 1 million people.

First Light Ventures has committed $150,000 to establish the Unreasonable Village Fund. This fund will be exclusively dedicated to the entrepreneurs in our 2010 Institute and will give them the ability to invest in one another's ventures. Inspired by village banking models used in microfinance, this fund will test a hypothesis that entrepreneurs, working together and providing support to one another, will make highly intelligent investments in one another’s companies.

GoodCap’s Social Enterprise Expansion Fund (SEEF) provides growth capital to social enterprises that create innovative and self-sustaining solutions to the root causes of inequity in the U.S. and around the world. These enterprises leverage the power of the market to create positive social change, such as providing job opportunities for at-risk youth, helping developing world farmers become self sufficient, improving access to healthcare for low-income families, and supporting literacy and education efforts across the globe. These double- and triple-bottom line enterprises pursue social impact while seeking to build scalable and competitive businesses that generate attractive financial returns for investors.

The Social Enterprise Expansion Fund provides equity and equity-like growth capital to social enterprises that are ready to expand. We target social enterprises (both for profit companies and nonprofit organizations with earned income) with scalable business models that have the potential to create systemic and large-scale social change and generate an attractive return for investors who have the right kind of human and financial capital. Because we are at the forefront of the emerging social capital market, we have access to the best social investment opportunities in this space.

GoodCap is a hands-on investment partner, providing our portfolio companies with not only financial resources but also the human capital and strategic help they need to achieve their social missions and financial goals. For example, we helped our first portfolio company, Better World Books, enhance its social impact strategy by carving out an equity stake for its nonprofit partners and optimizing its partner funding model. Meanwhile, we also helped the company fine-tune its book pricing strategy, which will likely improve margins over the long term. During engagements with our portfolio companies, we are able to bring many valuable resources to the table thanks to the combined talent of our management team, advisory board, and vast networks, which bring expertise from the worlds of social investment, technology, entrepreneurship, venture capital, and philanthropy.

Overseen by an expert investment committee with decades of experience in venture capital, investment banking, operations, and social entrepreneurship, the Social Enterprise Expansion Fund is closely managed and applies the same rigor to due diligence and the bottom line and exit strategies of its portfolio companies as would a traditional venture capital firm.

6 comments:

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

This is a great resource. Thanks for posting. Raising capital for social enterprises is a tough road to plow. Having boot-strapped and grown our social venture from a simple site to now more than 8,000 pages of content, I am encouraged about what the future holds for social entrepreneurs in 2010. Keep inspiring us with your posts:)

This blog is a great initiative, and moreshould be done in providing seed and growth capitalto Social Enterprises.Moreover I personally believe that young entrepreneurs have to know WHY and HOW they could start a Social Venture.For this purpose, I strongly recommend a recent book, Social Entrepreneurship, The Secret to Starting a Business Worth Living For.The good review of the book can be found Here.